Chapter 7 test - Custom Scholars
Home » Flash Cards » Chapter 7 test

# Chapter 7 test

question
What is an explicit cost?
A payment for resources not owned by the firm
question
When marginal product is rising, what happens to marginal cost?
Marginal cost is falling
question
When marginal product is falling, what happens to marginal cost?
Marginal cost is rising
question
In comparing the change between total cost and total variable cost associated with an additional unit of output, we find that:
Both are equal to marginal cost
question
If in the short run a firm's total product is increasing, then its:
Marginal product could either be increasing or decreasing
question
If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point?
Divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs in the long run
question
A local bakery hires two additional bakers. What kind of adjustment is this?
Short-run
question
As output increases, total variable costs:
Increases at a decreasing rate and then at an increasing rate
question
Monopolistic competition
Arises where many firms are competing in a market to sell similar but differentiated products
question
Other things equal, if the prices of a firm's variable inputs were to fall:
Marginal cost, average variable cost, and average total cost would all fall
question
In the short run, it is impossible for an expansion of output to cause an increase in:
average fixed costs
question
The law of diminishing marginal returns describes the:
Relationship between resource inputs and product outputs in the short run
question
What statement concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?
AP continues to rise so long as TP is rising
question
Other things equal, if the wage Raes paid to a firm's labor inputs were to rise, we would expect the:
AVC, ATC, and MC curves all to rise
question
When diseconomies of scale occur:
The long-run average total cost curve rises.
question
A firm's total variable cost will depend on:
The prices of its variable inputs, the production techniques that are used, the amount of output produced
question
To economists, the main difference between the short run and the long run is that:
In the long run all resources are variable, while in the short run at least one resource is fixed
question
Which of the following is most likely to be a variable cost?
a. Fuel and power payments
b. Interest rates on business loans
c. Rental payments on iBM equipment
d. Real estate taxes
Fuel and power payments
question
If technological advance increases a firm's labor productivity, we would expect its:
Average total cost curve to fall
question
Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
Total revenue
question
When AP is rising AVC is -----, and when AP is falling AVC is -------
When AP is rising AVC is falling, and when AP is falling AVC is rising?
question
What term is used to describe the additional cost of producing one more unit?
Marginal cost
question
If a firm decides to produce no output in the short run, its costs will be:
Fixed costs
question
The 1st, 2nd, and 3rd workers employed by a firm add 24, 18, and 9 units to total product. Therefore the:
Marginal product of the 3rd worker is 9
question
When a firm does more of something, it gets better at it. This learning-by-doing is:
A. a source of diseconomies of scale.
B. a source of economies of scale.
C. called the principle of natural progression.
A source of economies of scale
question
When average fixed costs are falling
Average variable cost may be either rising or falling
question
How will TVC increase in the short run?
TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate
question
A firm that faces no completion is referred to as a
Monopoly
question
As a firm produces successive units of output in the short run we would expect:
TVC to increase initially by declining amounts, but eventually increase by increasing amounts
question
The transition point between where MC is pulling down and pulling up AC always occurs at the
Minimum point of the AC curve
question
Which of the following is mostly likely t be an implicit cost for Company X?
A). depreciation charges on company-owned equipment
B) rental payments on IBM equipment
C) payments for raw materials purchased from Company Y
Depreciation charges on company-owned equipment
question
in microeconomics, the term ________ is synonymous with economies of scale
Increasing returns to scale
question
A situation where the level of output, scale and average costs are all rising is called:
a. decreasing returns to scale
b. diseconomies of scale
c. diminishing returns to scale
d. both a and b are correct
Both a and b are correct
question
The firm's average fixed costs are:
The vertical distance between AVC and ATC
question
What expresses the law of diminishing marginal returns?
As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital), beyond some point the resulting extra output will decline
question
Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs?
Cost incurred in the act of producing
question
Which of the following falls outside of the classification of business expenditures
Costs of research and developement
question
What would typically be ignored because spending has already been made and cannot change?
Sunk costs
question
The total ouput of a firm will be at a maximum where:
MP is zero
1 of 39
question
What is an explicit cost?
A payment for resources not owned by the firm
question
When marginal product is rising, what happens to marginal cost?
Marginal cost is falling
question
When marginal product is falling, what happens to marginal cost?
Marginal cost is rising
question
In comparing the change between total cost and total variable cost associated with an additional unit of output, we find that:
Both are equal to marginal cost
question
If in the short run a firm's total product is increasing, then its:
Marginal product could either be increasing or decreasing
question
If a solar panel manufacturer wants to look at its total costs of production in the short run, which of the following would provide a useful starting point?
Divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs in the long run
question
A local bakery hires two additional bakers. What kind of adjustment is this?
Short-run
question
As output increases, total variable costs:
Increases at a decreasing rate and then at an increasing rate
question
Monopolistic competition
Arises where many firms are competing in a market to sell similar but differentiated products
question
Other things equal, if the prices of a firm's variable inputs were to fall:
Marginal cost, average variable cost, and average total cost would all fall
question
In the short run, it is impossible for an expansion of output to cause an increase in:
average fixed costs
question
The law of diminishing marginal returns describes the:
Relationship between resource inputs and product outputs in the short run
question
What statement concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct?
AP continues to rise so long as TP is rising
question
Other things equal, if the wage Raes paid to a firm's labor inputs were to rise, we would expect the:
AVC, ATC, and MC curves all to rise
question
When diseconomies of scale occur:
The long-run average total cost curve rises.
question
A firm's total variable cost will depend on:
The prices of its variable inputs, the production techniques that are used, the amount of output produced
question
To economists, the main difference between the short run and the long run is that:
In the long run all resources are variable, while in the short run at least one resource is fixed
question
Which of the following is most likely to be a variable cost?
a. Fuel and power payments
b. Interest rates on business loans
c. Rental payments on iBM equipment
d. Real estate taxes
Fuel and power payments
question
If technological advance increases a firm's labor productivity, we would expect its:
Average total cost curve to fall
question
Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.
Total revenue
question
When AP is rising AVC is -----, and when AP is falling AVC is -------
When AP is rising AVC is falling, and when AP is falling AVC is rising?
question
What term is used to describe the additional cost of producing one more unit?
Marginal cost
question
If a firm decides to produce no output in the short run, its costs will be:
Fixed costs
question
The 1st, 2nd, and 3rd workers employed by a firm add 24, 18, and 9 units to total product. Therefore the:
Marginal product of the 3rd worker is 9
question
When a firm does more of something, it gets better at it. This learning-by-doing is:
A. a source of diseconomies of scale.
B. a source of economies of scale.
C. called the principle of natural progression.
A source of economies of scale
question
When average fixed costs are falling
Average variable cost may be either rising or falling
question
How will TVC increase in the short run?
TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate
question
A firm that faces no completion is referred to as a
Monopoly
question
As a firm produces successive units of output in the short run we would expect:
TVC to increase initially by declining amounts, but eventually increase by increasing amounts
question
The transition point between where MC is pulling down and pulling up AC always occurs at the
Minimum point of the AC curve
question
Which of the following is mostly likely t be an implicit cost for Company X?
A). depreciation charges on company-owned equipment
B) rental payments on IBM equipment
C) payments for raw materials purchased from Company Y
Depreciation charges on company-owned equipment
question
in microeconomics, the term ________ is synonymous with economies of scale
Increasing returns to scale
question
A situation where the level of output, scale and average costs are all rising is called:
a. decreasing returns to scale
b. diseconomies of scale
c. diminishing returns to scale
d. both a and b are correct
Both a and b are correct
question
The firm's average fixed costs are:
The vertical distance between AVC and ATC
question
What expresses the law of diminishing marginal returns?
As successive amounts of one resource (labor) are added to fixed amounts of other resources (capital), beyond some point the resulting extra output will decline
question
Which of the following falls outside of the classification of business expenses that fall into the category of fixed costs?
Cost incurred in the act of producing
question
Which of the following falls outside of the classification of business expenditures
Costs of research and developement
question
What would typically be ignored because spending has already been made and cannot change?
Sunk costs
question
The total ouput of a firm will be at a maximum where:
MP is zero

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

## Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.